Does the fixation on a huge potential Total Addressable Market (#TAM) make sense? or is it merely an overblown obsession among #founders and venture capitalists (#VCs)? The question keeps coming up as founders and VCs delve into the debate around the significance of TAM in a company's success.
A recent chat I had with a brilliant, early-stage tech founder highlighted concerns about their product roadmap. The essence of the matter was whether to broaden the product offering to encompass additional, albeit generic, use cases, thereby significantly expanding their TAM. This thought isn't isolated; it mirrors a broader trend where VCs evaluate ventures based on the 'grandiosity' of their TAM, posing the crucial question, "Can it be a $1B company?"
However, reality may not align with this TAM-centric approach. For an aspiring $1B company, especially for a founder navigating the early stages, the odds might resemble the likelihood of getting run over by a bus! The counterargument? Prioritise building a #product that authentically addresses real-life problems and provide immediate and specific value to end-users.
Our experience in the past few years of investments and work with our portfolio teams reveal a compelling trend — ventures focusing on a rather specific user pain, delivered by a 'deep-tech' technology, with a broader product road map in mind, tend to gain traction far more rapidly than those opting for a broader solution to begin with. What is your take on this?
CCL
The difficult I do immediately. The Impossible takes a little longer
3yWell it's not the whole AWS, just one region. Ideally that bell's infrastructure should have been duplicated to another region for failover... Or had that company not been acquired by Amazon - they could have gone multi-cloud which is safer but even more expensive than multi-region. But I guess the right answer is to accept the fact that doorbell is not a critical service and the financial cost involved does not justify the duplication as the failure as occurred today are pretty rare :)